Beleagured lender IndusInd Bank Ltd's shares gained on Thursday, May 29, even after markets regulator Securities and Exchange Board of India (SEBI) barred former IndusInd Bank, MD&CEO, Sumant Kathpalia, former Deputy CEO Arun Khurana, and three other former senior officials of the bank for alleged insider trading.
SEBI’s whole-time member Kamlesh Chandra Varshney in his interim order noted that “All the Noticees, viz. Noticee Nos. 1 to 5 are hereby restrained from buying, selling or dealing in securities, either directly or indirectly, in any manner whatsoever, until further orders”.
The other former senior officials of IndusInd Bank include: Sushant Sourav, Head Treasury Operations; Rohan Jethanna, Head- GMG Operations; and Anil Marco Rao, Chief Administrative Officer - Consumer Banking Operations. All of them have resigned from the bank.
SEBI also noted that the former management members traded in the shares of the bank after knowing that the derivative accounting issue will have a negative impact on the share price. SEBI alleged that these officials sold the shares to avoid the losses.
At 9.25 am, shares of the bank were quoting Rs 809.2 on the NSE, higher by half a percent.
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In this email, a figure of Rs 1749.98 crore had been reported representing the impact due to discrepancy in account balances of the derivative portfolio. Since the date of the email is November 30, 2023, and the last quarter end before this date was quarter ending September 2023, it can be reasonably inferred that the figure mentioned was for the said impact i.e. quarter ending September 30, 2023, SEBI said in its order.
On the insider trading front, SEBI's examination of emails shared by IndusInd Bank and KPMG, showed that Arun Khurana sold a total 3,48,500 shares during the Unpublished Price Sensitive Information (UPSI) period while being in possession of the UPSI and no shares were bought during the UPSI period.
Sumant Kapthpalia sold 1,25,000 shares of the bank, Sushant Sourav sold 2,065 shares, Rohan Jathanna, Head – GMG Operations sold 2,000 shares, and Anil Marco Rao sold 1,000 shares.
The value of Arun Khurana’s share sale was Rs 52.98 crore, Sumant Kathpalia's was Rs 19.17 crore, Sushant Sourav's was Rs 26.29 lakh, Rohan Jathanna's was Rs 25.3 lakh, and Anil Rao's was Rs 14.50 lakh.
When the disclosure was made on March 10, 2025, the share price of IndusInd Bank crashed 27.165 percent from a close price of Rs 900.60 on March 10, 2025, to a close price of Rs 655.95 on March 11, 2025. Therefore, the total loss avoided was 27.17 percent, which translates to Rs 19.78 crore.
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